VT Citizens Business Confidence jumps, index remains expansionary in Q3

Solid corporate revenue, resilient consumer trends support a steady business environment 

Vermont Business Magazine The national Citizens Business Conditions Index (CBCI) moderated to 50.04 in the third quarter but remained in expansionary territory. The second consecutive reading above 50 indicates that business conditions continue to be solid.

Vermont leapt ahead to 53.43, slightly above the regional average according to Citizens Financial Group data – increasing almost 12% since this time last year. See attached or below for more, including a graph on the latest economic findings. (The national index moderated to 50.04 in the third quarter but remained in expansionary territory. The second consecutive reading above 50 indicates that business conditions continue to be solid.)

Citizens’ proprietary data showed a continuation of positive company revenue trends across most industries and geographies in the third quarter. Consumer trends also remained resilient against the backdrop of a strong labor market. 

These factors more than offset some idiosyncratic macro challenges during the period, including the impact of severe weather events and overall cautiousness in the business environment ahead of the upcoming U.S. election.

“Overall business conditions are strong and Citizens’ middle market and mid-corporate clients continue to perform well,” said Eric Merlis, managing director and co-head of global markets, Citizens. “As we approach the conclusion of election season, we are working closely with our clients to help them navigate the uncertainty and prepare for potential market and business implications.”

The underlying components of the index reflected a mixed, but relatively steady, operating backdrop. 

• The ISM non-manufacturing component remained expansionary, reflecting continued consumer resilience.
• The activity data of Citizens’ Commercial Banking clients showed a continuation of solid revenue trends, providing an additional boost to the index.
• Employment trends, as measured by initial jobless claims, continue to be healthy but were neutral to the index.
• New business applications also had a neutral impact for the quarter, reflecting some cautiousness around new business investment ahead of the U.S. election.
• The ISM manufacturing component was contractionary for the eight consecutive quarter.

Overall, the third quarter CBCI reveals a steady business environment that appears to have found balance. 

“The third quarter index reading shows a business environment that has reached equilibrium,” added Merlis. “Easing monetary policy should continue to support constructive business conditions, particularly as uncertainty in the U.S. political and regulatory environment likely abates in the coming quarters.”  

Citizens is a trusted strategic and financial adviser, consistently delivering clear and objective advice. The Citizens approach puts clients first by offering great ideas combined with thorough market knowledge and excellent execution, to help our clients enhance their business and reach their potential. For more information, please visit the Citizens website.

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